1:30pm (EST)
The bears are pushing support levels today following a weaker-than-expected ADP Employment Change report, which reported private payrolls increased by 179,000 in April. This was lower than the 195,000 Wall Street had expected but futures were relatively unchanged before the bell after the news. Of course, we are more worried about Friday’s non-farm payrolls and unemployment numbers which could move the market if we are headed in the wrong direction again.
The ISM Non-Manufacturing Index for April came in at 52.8 which was a lot less lower than the 57.4 print that had been expected and below last month’s reading of 57.3.
The bears got aggressive after hearing the news.
The Dow is down 105 points to 12,701 while the S&P is lower by 11 points to 1,345. The Nasdaq is showing a decline of 24 points to 2,817.
Turning to earnings, many of the big names have already confessed their 1Q numbers but we still have a few weeks to go before Wall Street begins to focus its attention towards upcoming 2Q earnings. Earnings have been strong but how companies deal with higher costs will play a key role going forward.
Kellogg (K, $56.60, down $0.84) missed expectations as higher costs for ingredients weighed on profits. The company reported earnings of $366 million, or $1.00 a share, versus year-ago results of $418 million, or $1.09 a share. Analysts were expecting $1.03 a share.
Elsewhere, First Solar (FSLR, $125.72, down $8.94) reported profits of $116 million, or $1.33 a share versus $172 million, or $2.00 a share, in the year ago quarter. Revenue came in at $567 million, slightly lower than the $568 million recorded a year ago, but ahead of the Street’s forecast for sales of $544 million. Looking forward, the company reaffirmed its full-year guidance for earnings of $9.25-$9.75 a share on revenue of $3.7-$3.8 billion.
Although First Solar beat estimates and said some good things, investors are reacting to the year-over-year decline of 33% on their top line.
Silver is down another $3.42 to $39.16 an ounce after it finished last week near $48.50 while Gold is lower by $32 to $1508 an ounce. Weakness among commodities comes in the face of ongoing weakness in the dollar which is down another 0.5% today.
We will be back in the morning with a full update. Subscribers, check the Members Area for the updates.
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